Adelaide Co., Ltd.

Case:

Key Word(s):

Business closure, lease expiring

Reference:

Fair Trade Commission Decision of February 20, 2013 (the 1111th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 102014

Industry:

Retail Sale of Home Furnishings in Specialized Stores (4743)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC received a written complaint from an individual about a bedding factory posting "closing business, lease expiring" advertisements in newspapers for at least a year. The informers thought this could constitute false advertising.
2. Findings of the FTC after investigation:
   

   Adelaide Co., Ltd. (Hereinafter referred to as Adelaide Co.) posted on July 5, 2012 an advertisement that included the wording of "Lowest prices ever from July 5 to 8; business closure due to lease expiration, your final chance," giving the public the impression that the final special sale would last only 3 days because the business was closing down due to lease expiration. However, the investigation showed that Adelaide Co. continued to post the same advertisement on July 7, 17, 23 and 25, August 17, and September 5 and 14 in 2012. The special sale never ended on July 8, 2012 as advertised. Adelaide Co. expressed that the lease for the Chongde Road outlet had been signed for the period from 2009 to July 20, 2012, but the investigation revealed that the company extended the lease for another 30 days (from July 21 to August 19) after the lease officially expired on July 20, 2012 and extended it again on August 16 for another 30 days (from August 20 to September 18). As a matter of fact, the business closure never happened.

3. Grounds for disposition:
   

   "Business closure" is generally understood as a business stopping the provision of products or services. The advertisements posted by Adelaide Co. contained the wording of "business closure", with specific dates and the number of days remaining provided in the advertisement too. Compared to the advertising term emphasizing only "business closure," the advertisements stressed the final count down to the day of business closure to urge interested consumers to make a quick move. In reality, however, the company kept extending the closure deadline and this was inconsistent with the aforesaid general understanding. The difference had exceeded what the public could accept. The conduct was likely to create wrong perceptions or decisions among the public in violation of Article 21(1) of the Fair Trade Law. The FTC therefore imposed on Adelaide Co. an administrative fine of NT$50,000.

Appendix:
Adelaide Co., Ltd.'s Uniform Invoice Number: 89920183

Summarized by: Chen, Chien-Yu; Supervised by: Chen, Chun-Ting